5 Questions After My 1st Investment Inside A Mobile Home Park
From this author's experience, it seems to be fairly common that we real estate investors often remember our very first real estate investment deal. I certainly cannot remember my 8th or 25th mobile home investment; however, I can remember my first mobile home flip vividly, both my thoughts and emotions. Additionally I remember that after this first deal I asked myself a series of questions.
5 Questions I Asked After My First Home Investment Inside a Mobile Home Park
Quick deal overview: This first property was a 1980's big 4/2 doublewide mobile home inside a family style mobile home community. Purchased for a price of $3,000, payable as $300 due at closing and $300 per month for 9 consecutive months. Cleaning, minor plumbing fix, and minor A/C fixes added less than $1,000 to the total. Sold the mobile home in less than 30 days via owner financing to a qualified buyer for $27,000. Payable as $2,500 due at closing and $350 per month for 70 months at 0% interest.
Pro Tip: Aim to learn how to thoroughly screen and vet all adult renters or payment-buyers that wish to move into your investment properties. This first mobile home I sold four times before securing a buyer that finally paid the home off 12 years later.
1. Why can't our sellers and buyers just work together, and therefore not need an investor?/
They can. There is nothing physically stopping these two parties from working together. If everyone was 100% trustworthy then owners of mobile homes could set up win-win relationships with payment-buyers that would happily pay for the mobile homes in question. However this is not the world we live in and people lie and cheat.
The fact is that many mobile home sellers are extremely hesitant about renting or selling their mobile homes on payments to end-users. Many sellers just don't trust traditional buyers. Additionally, many mobile home sellers are unable to sell via owner financing because they need 100% of the profit in order to move into a new property.
In short, most non real estate investors do not look at real estate as a way to make a serious living and/or career. When owner occupants see their unwanted property they may see a headache they want gone now. Most of our buyers and sellers are experts at what they do. While they may be good at pharmacy, construction, teaching or more, it is we the investors that have the real estate experience to proactively solve problems, think creatively, and present win-win solutions where others do not.
Pro Tip: Aim to focus on working with sellers that want or need the help of a real estate investor. If a seller is selling for a retail price or has plenty of time before he/she must leave then this is probably not the seller that needs your help the most.
2. Looking at this 1st deal, what did I like and dislike about what just happened?
The answers to this question should change for every deal and almost every investor. Aim to consider…
- A list of things in the deal you did that actually worked out.
- A list of things in the deal you did that failed to produce results or profit.
- A list of things to improve for the next deal.
Personal Story: The day I purchased this first mobile home I was obviously so happy. However that same night while discussing things with a girlfriend I remember crying because I felt as if I had taken advantage of the sweet seller that needed help. The reason I say this is because the seller was originally asking $8000 when I first looked at the property. Over the course of a few hours I talked her down in price to the $3000 with terms. I promised myself that night that I would no longer be greedy in deals. The old saying goes, “pigs get fat while hogs get slaughtered”.
Find some quite time to mentally review the deal from start to finish, the advertising that found the lead all the way through to reselling/renting the mobile home. Where are your confusions, missing knowledge-gaps, and questions? Make sure these questions are answered as soon as possible.
3. Should I tell anyone what I'm doing?
Perhaps I'm alone in this question. However after my first deal I was quite embarrassed that I couldn't seem to cut it as a traditional single-family home investor; instead my first deal was a mobile home inside of a pre-existing mobile home community. While I did tell my very immediate family members and best friend, I didn't tell any of the investors I had already met at my local real estate investing clubs.
My brain was torn in two directions…
Positives: This mobile home investing seems to be a value and generating real money.
Negatives: Other investors are going to laugh at me and think less of me.
Pro Tip: Concerning other real estate investors, aim to tell as many people as possible that you are interested in any and all unwanted mobile home leads they come across. If you close a deal you'll pay an appropriate finder's fee to the happy investor. Aim to follow-up with these investors and also learn what it is they specialize in so you may potentially add value to their real estate businesses as well.
4. Should I start a company to invest with, rather than continuing investing in my own personal name?
The answer for this author is yes. However the answer for you is definitely, “it depends”. It may be prudent to visit a financial planner or tax professional before moving forward to establish a company. It's typically better to have more clarity than less clarity, and a local professional may be able to help answer your questions. Get a recommendation from your local real estate investor's club.
Pro Tip: While talking with financial planners, attorneys, or tax professionals try to wait a few nights to consider any propositions or spending money with these individuals.
5. What should my next steps be?
With this first mobile home deal under my belt I wanted more, any more mobile homes. I found a local mentor who was the head of my local real estate investors club. While he did not have mobile home investing experience he did help give me confidence in a number of other ways that were invaluable in my trial and error learning process.
Pro Tip: Join some or all of your local real estate investors associations or clubs. While some clubs are in business just to sell memberships or affiliate seminars, there are other clubs that have a genuine interest in helping others succeed and answering questions. Additionally, some of these groups have more active and helpful real estate investors than others. Some of these investors will become your new close friends.
Every successful real estate investor starts out with their very first real estate transaction. Most of us look back and see all the mistakes we made along the way. Most of us can equally look back proud that we were taking the needed action in order to make these mistakes in the first place. Active real estate investors and mobile home investors take action daily. Aim to help local parks, buyers, and sellers today.
Any questions or concerns? Please comment them below.
Love what you do daily,